WHAT CAUSED THE DOWNTURN

Too

much good news. The US economy is going gangbusters. This sparked a fear that inflation will rise and the US Federal Reserve may need to lift official interest rates.

trading fuels volatility – the sell triggers come quickly and they accentuate falls. US share market rise went too far. American shares rose over 20 per cent last calendar year and 6 per cent just in January.

Computer The The golden rules of share investing 1. Do

your homework … don’t buy or sell on rumour, hunch or impulse.

the risk and reward … look at past performance and future prospects and if the worry of shares keeps you awake at night, don’t buy them.

checking after you’ve bought … investment conditions, company management and objectives can change.

patient …don’t expect wealth overnight.

forget shares can bring income and capital appreciation.

alert to trends … try to put political, economic, scientific events through an investment filter.

prepared for unexpected events …. review promptly before acting.

the environment. Don’t buy just because the price looks cheap.

a loss quickly … don’t let pride prevent you from correcting a mistake.

the market … don’t try to beat the trend.

a profit … it is better to make a little less profit by selling too soon than to take the greater risk of overstaying the market.

2. Balance 3. Keep 4. Be 5. Don’t 6. Be 7. Be 8. Check 9. Take 10. Follow 11. Take